Will Lansing, FICO
Your favorite score
When Will Lansing took over FICO 11 years ago, the company was stagnant. Prices were frozen, they were at war with the credit bureaus, and the industry did not take them seriously. Today, FICO scores have become a deeply embedded industry standard, with the company’s revenue surpassing a billion in revenue and brand awareness going from 30 to 90 percent during Lansing’s time at the helm.
Here are Lansing’s key insights that made this transformation possible:
Hold Your Position
When Lansing came to FICO, the company’s relationship with the credit bureaus had grown stale. He understood that to make the scores business profitable, he would need pricing power. So he sent letters of termination to all the credit bureaus they were partnered with at the time, telling them that the arrangement needed to be updated or they could no longer use FICO scores. This did not go down easy, negotiations went on for 4 months. Ultimately, FICO stood its ground, and the profits from scores doubled almost instantaneously. Currently, the scores business completely subsidizes FICO’s software business and has total pricing power, releasing a new price list yearly based on their projections.
Keep It Simple
The FICO score’s success and embeddedness are largely due to its straightforward simplicity of the three-digit number. According to Lansing, the FICO score is designed to be cheap, efficient, and not have a lot of data. While the data can be built on top of, the score itself is useful and memorable because it does not over-complicate.
Sophisticated IP, Lean Sales Force
“Nobody has exactly what we have.” The uniqueness of FICO’s intellectual property allows the company to maintain business operations with a tiny sales force that interfaces directly with banks. Beyond the scores, FICO’s product, the decision-making platform, is very sophisticated and implementable, using standards developed by FICO to leverage any company’s data to optimize decisions on any level or scale. Therefore, the sales pitch remains far from over-zealous: try it out on a small scale, and look at the returns.
Don’t Underestimate Money
Lansing wants against underrating money as a motivating factor and says that he pays his people a fortune to maintain a healthy incentive structure. For every point of over-performance, directors receive 4% more, and for every point of under-performance, 4% less. This, according to Lansing, has helped him cultivate a team of people that work really hard and love their job.
Empower Employees
Lansing does not approach being a leader as synonymous with being a prophet or an oracle. To solve problems, he suggests asking the employees questions about what they think is the best course of action, which leads to generating many more solutions in the long term. In Lansing’s view, empowering employees comes down to teaching them how to think about problems and encouraging them to take a proactive role in decision-making.
This is also the way that Lansing approaches recruiting. Beyond the rubrics developed with his HR director, Lansing says that he asks potential candidates directly whether they think it’s a good idea to hire them for a particular position. “You know yourself way better than I know you, you tell me.”
Take Care of Your People
“We care about the people a lot” says Lansing. FICO surveys its employees consistently. In addition to that, the executive team puts together a detailed report taking into account every director’s and manager’s thoughts on internal company matters as well as their personal aspirations and career goals. This process is taken very seriously and helps stay on top of any intra-company issues that may arise and take steps to ensure that employees dealing with personal matters have the necessary support. According to the latest numbers, 78% of FICO employees are either happy or very happy.
Take More Risks
Before FICO, Lansing worked in several different industries: law, private equity, and consulting. His experiences were varied but have all contributed to where he is now. Looking back, the advice he has for smart and competent people entering or going back into the workforce during this turbulent time is to take more risks and acquire more data about themselves. According to Lansing, there is no shame in jumping around, it is important to see what you like and what you’re good at.